Toyota: ‘Carbon is the enemy, not a particular drivetrain’
Toyota Motor chief scientist Gill Pratt denies that Toyota has been slow to develop full battery solutions. However, a significant portion of the $10 billion per year the company spends on R&D goes to scientists working on battery development.
In a blog post, Pratt counters the criticism of Toyota dragging its feet about BEVs and spending too much money on all kinds of propulsion and drivetrains. We resume some of the questions he was asked in a reaction to its earlier posts.
Has Toyota dragged its feet on Battery Electric Vehicle (BEV) investment because of its investment in Hydrogen Fuel Cell Electric Vehicles (FCEVs)?
“No. Here are the facts: Toyota spends about $10 billion per year on R&D. That pays for a lot of R&D on fuel cells, but it also pays for over a thousand scientists, including over a hundred in the US, working on battery R&D. And, so far, they’ve generated one of the largest battery patent portfolios of any company, including far more patents on solid-state batteries.”
“Toyota was, in fact, an early developer of our own BEV, and we were also an early investor and joint developer with Tesla. Until now, high battery costs have prohibited a more widespread effort, but by 2030, we expect that approximately 20% of our global vehicle production will already be BEVs.”
Why pursue four different types of drivetrains? Isn’t that wasteful of R&D investment?
“Toyota is known for being scrupulously efficient in manufacturing and has helped other companies become more efficient using concepts from the Toyota Production System (TPS). But being efficient about R&D means managing the risk of lost opportunities if we make decisions too soon. And it also means developing products for diverse customers, not just a category of customers.”
“This boils down to two principles: first, the solution to uncertainty is diversity; and secondly, what is best for the average person is not best for every person. I will explain this a little more substantially.”
“The first principle is a profound, fundamental lesson from nature. Sure, it feels more satisfying to make bold predictions and decisions right away and put all of our eggs in one basket. But making decisions too soon is foolish. For example, we know that total carbon emissions in transportation must be drastically reduced, and we know that BEVs are part of the solution. However, we do not know (nor, in truth, does anyone know) whether BEVs are the entire solution.”
“Faced with this uncertainty, our strategy is to place several bets on several promising pathways, including BEVs, and adapt our strategy as we learn. This is the core idea of Toyota’s philosophy of Kaizen and the approach of every investor who diversifies his portfolio to manage uncertainty. It is also the strategy nature has used so successfully for evolving life on earth.”
It seems to us that the second principle is key to the entire Toyota strategy…
“What is best for the average person is not best for every person. Everyone understands this principle when it comes to clothing: maximizing a group’s total comfort isn’t achieved by making everyone wear ‘medium’. The same is true for mobility. As battery technology improves and the carbon emissions from the electrical power grid decrease, long-range BEVs will become more attractive, both from practicality and environmental point of view to the average customer.”
“But does this mean that in 2030, the greatest net carbon reduction would be achieved by making every customer buy a long-range BEV? No, it does not. However, for some customers, particularly those who live in areas with low-carbon intensity electrical power generation and easy access to rapid (level 3) charging infrastructure for long trips, replacing a gasoline-fueled car with a long-range BEV will be the best way for them to contribute to carbon emission reduction.”
“But for other customers in different circumstances, the best way to contribute to carbon emissions reduction will be different – perhaps a PHEV or an FCEV. For example, for a customer using his car mostly for commuting in an area with fewer high-speed chargers, a PHEV would make more sense.”
But isn’t it true that PHEVs don’t achieve their potential high-carbon reduction in real-world use, particularly in Europe?
“We know that PHEV owners with low-range PHEVs, poor access to overnight charging locations, or company-provided gas credit cards (that disincentivize electric charging) more frequently refuel with gasoline than necessary. But these factors are reasons to fix those problems, not reasons to dismiss PHEVs.”
“Modifying company ‘gas card’ policies, using slightly larger batteries in PHEVs, and installing more overnight charging infrastructure with some rapid chargers is a more practical way to reduce carbon sooner than building only BEVs and installing the many more rapid chargers an all-BEV approach would require.”
Doesn’t your argument about ‘right-sizing’ battery packs depend on a shortage of battery supply?
“No. Right-sizing battery packs into diverse types of EVs and limiting the ramp-up speed of global battery production is a good idea even if battery supply is not otherwise limited. Batteries are continuously improving. Compared to current technology, future battery technology (including possibly Toyota’s solid-state batteries) will be produced with fewer carbon emissions, reduced environmental impact, at lower cost, with higher performance, and with fewer recycling problems.”
“By spreading today’s battery cells across a diversity of EV types now, we can maximize carbon reductions immediately. Then, as battery technology improves, we can ramp up the production of more efficient, less carbon-intensive batteries.”
“Here’s an analogy: cell phone technology allowed developing countries to leapfrog wired telecommunications infrastructure. It would have been a waste of time and resources for these countries to have invested heavily in wired telephone infrastructure when cell phone technology was just around the corner. We believe there is a corollary with the evolution of battery technology.”
Can Toyota meet aggressive, result-oriented, quantitative limits on how much carbon may be emitted over a vehicle’s entire lifetime?
“Yes, we can. Will Toyota meet this challenge by producing millions of BEVs? Yes, we will, and we will also offer other drivetrains for customers in circumstances where those vehicles are a better carbon-reduction choice.”
“We believe the best approach is for policymakers around the world to insist on results and allow innovators like Toyota and our competitors to create diverse solutions to achieve those results.”
“In years past, when other pollutants were of greatest concern, governments established limits on the number of emissions permissible and necessary fleet fuel efficiency and then allowed the private sector to innovate catalytic converters, engine control systems, and new types of drivetrains to meet those limits.”
“We believe this proven approach of driving innovation by focusing on outcomes — rather than prescribing particular technology solutions — is the best way to reduce carbon emissions.”
“Carbon is the enemy, not a particular drivetrain. Battery Electric Vehicles are a wonderful way to reduce carbon for some customers. Other types of electrified drivetrains are best for other customers, especially in the near future. So let’s use all the tools in the toolbox.”
Different views, one goal
It has been clear for a while already that the world’s number one manufacturer, Toyota, has chosen a more careful path toward electrification, leaving open more possibilities for drivetrains than the sole BEV. The fact that it has been the leader in hybrid vehicles for a long time is for sure playing a role here.
While others are pushing ahead far more urgently with BEVs, others think the ‘Toyota way’ has more sense. Toyota has always argued that it is a global producer and that the customer needs in some parts of the world differ strongly from those in other parts of the globe. As CEO of Toyota Research Institute, Gill Pratt provides the arguments here for this point of view.
In the end, the ultimate goal is the same. Reaching a carbon-neutral society as soon as possible to reduce the effects of climate change.